To propel the company to new heights, John Ternus must look beyond the supply chain mastery that his predecessor, Tim Cook, perfected. It was Cook who transformed Apple into a commercial powerhouse valued at $5 trillion. Ternus is set to officially take the helm this Tuesday.

John Ternus will assume the role of chief executive this Tuesday, succeeding Tim Cook. Apple currently stands at the pinnacle of the industry—a position that presents both his greatest challenge and his most significant opportunity.

Taking over the world's second-most-valuable company, with an estimated valuation approaching $5 trillion, sets an incredibly high bar. Maintaining the breakneck growth pace of the past will be a formidable task. Industry observers point to a critical missing element since the Steve Jobs era ended: reigniting the company's innovation engine.

Tim Cook's genius lay in scaling the foundation Steve Jobs built to its absolute maximum. In the year Cook took over, Apple sold 72 million iPhones; this year, according to Counterpoint Research estimates, that number is projected to reach 255 million. During his tenure, Cook tripled product sales, maintained a strict annual product refresh cycle, kept a tight lid on high-risk capital expenditures, and returned over $1 trillion to shareholders through dividends and buybacks, multiplying Apple's market value by 13 times.

Of course, Apple hasn't completely halted innovation. Annual sales of the Apple Watch now exceed the entire Swiss watch industry's output, and AirPods' sales volume rivals the business scale of Major League Baseball. Additionally, Cook aggressively expanded the services business, which includes App Store revenue and billions of dollars in annual payments from Google.

However, in Wall Street parlance, all these positives are already priced into the stock. Apple shares trade at 33 times next year's earnings, compared to the S&P 500's overall multiple of just 20 times. This premium exists even though Apple's earnings growth rate is only half that of the broader market. Craig Moffett, an analyst at Moffett Nathanson, notes that amid widespread market anxiety over the returns on massive AI investments, investors are paying a premium for Apple's relative safety and stability. "But once a valuation bubble is inflated, that safety ceases to be safe," Moffett warns.

Meanwhile, several risk factors are being overlooked by investors. Entering the artificial intelligence era, Apple has ceded the industry leadership it held for 40 years—from the Apple II to the iPhone—as the arbiter of how consumers interact with devices. Companies like OpenAI and SpaceX are now building new hardware designed specifically for AI, leaving Apple on the back foot.

The AI wave has delivered a second blow to Apple. It is no longer the top buyer of critical components. AI cloud giants are pouring enormous sums into chip manufacturers, crowding out the production capacity Apple needs. This has driven up Apple's manufacturing costs, leading to price increases on models like the Mac and iPad, and creating shortages that leave consumer demand unmet.

Another supply chain challenge looming over Ternus is Apple's persistent reliance on the Chinese market. Cook skillfully navigated the tariff pressures of the Trump administration through adept political maneuvering; post-retirement, he will continue managing key foreign political relationships as executive chairman. But the fundamental tension remains unresolved: the vast majority of Apple's supply chain is located in a country locked in a long-term trade rivalry with the United States.

Separately, a California judge has issued a series of rulings that compress the high commissions Apple has long collected through in-app purchases, significantly restraining its fast-growing services business. App developers can now charge users through their own websites, bypassing Apple's up-to-30% fee. According to Appfigures, Apple's App Store commission revenue in the US for the quarter ending in June fell by 6%.

Still, when Ternus takes the stage on September 9th for his debut as Apple's CEO, he can do so with considerable confidence: the popularity of Apple devices has never been higher. Even with its AI features falling short, the iPhone 17 Pro may set sales records, bolstered by better cameras, enhanced battery life, and an arguably eye-catching new orange color option. The Mac is also experiencing a renaissance in the AI era, as Apple's in-house chips are exceptionally well-suited for running large language models on the desktop, leading to supply unable to keep pace with demand.

At his first iPhone launch event, Ternus may also reveal a key card: a foldable iPhone. While it won't be the first foldable phone on the market, IDC predicts that by the end of 2027, Apple will capture 40% of the foldable phone market, potentially owning nearly the entire segment.

Apple commands a massive and highly profitable user base, with a vast number of users eager for a more powerful AI assistant. The company has already pushed software updates touting that its new assistant can accomplish more tasks. Early tests indicate its command response speed still lags behind competitors; however, with backend support from Google, Siri has undergone a significant upgrade, evolving into a modern, conversational chatbot.

If Ternus can accelerate Siri's responsiveness and convince third-party app developers to open their service interfaces, allowing iPhone users to access services via natural language commands without constantly switching between apps, then Apple—despite its current overall lag in AI—could still become the company that delivers this technological revolution to the masses.